RCM amends ETR programs

The Royal Canadian Mint has amended its Canadian Gold Reserves and Canadian Silver Reserves exchange-traded receipt (ETR) programs.

The changes relate to redemptions for physical gold or silver bullion and the Mint’s liability exceptions regarding the risk of bullion loss. Effective Nov. 2, in circumstances in which a suspension or postponement of redemptions would otherwise be warranted, the Mint will be permitted to provide ETR holders redeeming for physical gold or silver bullion with substituted products.

“This would occur if the Mint determines that conditions exist which render impractical the fabrication, evaluation or sale of gold or silver or certain physical gold or silver bullion products,” reads a statement issued by the Crown corporation earlier this month. “In such a circumstance, the Mint may, in addition to suspending redemptions and postponing the date of delivery or payment of redemption proceeds, substitute the physical bullion requested by an ETR holder for a product in the form requested, but manufactured by a party other than the Mint with equivalent minimum purity to the product requested, and/or for a product manufactured by the Mint in a form available under the applicable Program but different than the form requested.”

The change could give the Mint more flexibility to “satisfy redemption requests for physical bullion in circumstances in which redemptions could have otherwise been suspended or postponed,” adds the recent statement.

RCM LIABILITIES

Effective Feb. 1, the Mint is also adding to the list of events for which the Crown corporation will not be liable for the loss, damage or destruction of the gold or silver bullion owned by ETR holders and held by the Mint.

“The Mint bears all risk of physical loss, damage or destruction of gold or silver bullion owned by ETR holders and stored at the Mint’s facility, except for any loss, damage or destruction as a result of circumstances or causes beyond the Mint’s reasonable control,” reads the Mint statement, which refers to these circumstances as “excluded events.”

To “conform to its insurance policy,” the Mint has added the following to its list of excluded events:

  • nuclear reactions;
  • nuclear radiation;
  • radioactive contamination; and
  • bio-chemical weapons.

Beginning Feb. 1, any loss, damage or destruction of gold or silver bullion “owned by ETR holders directly or indirectly caused by or contributed to by or as a result of any nuclear reaction, nuclear radiation, radioactive contamination or bio-chemical weapon will be the responsibility of ETR holders and not the Mint.”

For more information, visit reserves.mint.ca.

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